By Mark Curriden
Delta Airlines announced Monday that it’s subsidiary, Monroe Energy, is buying a refinery south of Philadelphia in hopes of lowering its future jet fuel expenses.
Fulbright & Jaworski corporate energy partner Dan Mark of Houston is representing Delta in the $180 million transaction.
While the dollar amount of the deal is modest, the terms of the transaction are certainly attracting attention – beyond the fact that the world’s second largest airline is getting into the oil and gas business.
“The government assistance as part of the acquisition definitely added to the complexity and uniqueness of this transaction,” said Mark. “Monroe Energy LLC was formed as part of the transaction to be the subsidiary that would own and operate the refinery.”
Mark also pointed out that Monroe is partnering with Phillips 66 and BP to supply crude oil and receive jet fuel in exchange for non-jet fuel outputs. The three-year deal provides that BP supply crude oil, which would be refined at the facility. Monroe Energy will exchange gasoline and other refined products from its refinery for jet fuel from Phillips 66 and BP elsewhere in the country.
An in-house lawyer at Delta said Monday that the Atlanta-based airline chose Fulbright and Mark to represent it in this transaction in part because of their experience representing companies buying and selling refineries. The lawyer noted that Mark and Fulbright represented Houston-based Shell Oil in its $1.63 billion sale of a California refinery and products terminal to San Antonio-based Tesoro Corp.
Mark led a Fulbright team that included Houston environmental law partner Eva Fromm O’Brien; and Houston corporate lawyers Kindel Elam, Daniel L. Tristan, Gabriel Jones, and Noah Speck. Austin environmental law partner Patricia Braddock also assisted.
The transaction is expected to close before July 1.
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